Volkswagon in trouble…

11/26/2015
By Logan Quirk

It has recently come to light that some vehicles from the German carmaker Volkswagen include a piece of software that is intended to defeat emissions tests. The software is designed to detect the conditions under which an emissions test is performed and then switch the engine into a test mode that would allow the vehicle to pass. However, under normal driving conditions, the car would emit up to 40 times the allowable level of nitrogen oxides.

This intentional deception by the carmaker is a serious violation of EPA regulations and it is also a breach of consumer trust. Close to half a million of these vehicles were sold within the United States and many drivers bought these cars specifically because they were viewed as an option for people that wanted a vehicle that ran clean while also providing good performance.

While this may not be a deception that poses a significant risk to the safety of consumers like the Takata airbags or the GM ignition switch scandal, it is still an issue that is likely to cost the company a significant amount of money when all is said and done.

While it is unlikely that the maximum fine will be imposed in this case, there is the potential for fines that reach close $20 billion dollars. Beyond that, there is also the potential for the costs of a recall and the lawsuits from consumers that are already being filed.

Additional fallout from the scandal has included the resignation of Volkswagen CEO, Martin Winterkorn, with Matthias Mueller being named as his replacement. The new CEO will be tasked with doing some serious damage control to show the public and regulators that they are serious about improving accountability and oversight.

Since this story only recently hit the headlines, this is just the beginning and more details are sure to be discovered as the EPA performs an investigation. Volkswagen has already put aside more than $7 billion dollars to cover some of the costs that will arise from these violations and their problems are likely to spread worldwide since the American market only accounts for a fraction of the cars that are affected.

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